Texas Billionaire Lands Big Deal For BP's Alaska Oilfields

BP announced today that it is selling its interests in four oilfields on Alaska's North Slope to Hilcorp Energy, the company owned by Houston billionaire Jeffery Hildebrand.

The assets include all of BP's interest in the Endicott and Northstar oilfields as well as a 50% interest in the Liberty and Milne Point fields.

According to Oil & Gas Journal, the assets are producing about 20,000 barrels per day of oil and equivalent natural gas.

A value for the deal was not disclosed. According to analysis from U.S. Capital Advisors, the average enterprise value of onshore oil and gas assets in the United States is roughly $90,000 per flowing barrel. This would imply that Hilcorp could be paying BP at least $1.5 billion. (Update: according to the Wednesday morning note from Tudor, Pickering & Holt, the net asset value of the properties is an estimated $2.6 billion.)

BP's head of exploration and production Lamar McKay said in a statement that the deal would free up BP to focus on its giant Prudhoe Bay field and the opportunity to export Alaskan natural gas as LNG.

Hildebrand, who has a net worth estimated by Forbes of $6.1 billion, has excelled by using new technology to breathe life into old fields cast off by the supermajors. With daily production volumes estimated to be on the order of 85,000 barrels per day, Hilcorp is among the very biggest privately held oil companies in the United States.

Hildebrand made a big move into Alaska in 2011 and 2012, acquiring a broad swath of assets in the Cook Inlet from
Chevron and
Marathon Oil.

In 2012 he sold his Gulf of Mexico oil and gas fields to EPL Oil & Gas for $550 million. His biggest payday was in 2011, when Hilcorp and partner KKR flipped 141,000 acres they had acquired in the Eagle Ford shale of Texas to Marathon Oil for $3.5 billion. Hilcorp's haul on that deal was an estimated $1.4 billion after taxes. A nice return on an initial investment thought to be just $100 million.

Hilcorp's partners in the Alaskan fields will include ExxonMobil, Chevron and Murphy Oil.